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Diane Gross, DRE Lic. #01217299
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Orange County CA Market Changing! ?

Tuesday, May 22nd, 2012
Finally a recognizable and ongoing change in the Orange County, CA housing market!
I hate to feel like, when I give you information about the market that it feels like I’m pushing you into making a decision to buy a home sooner than you’re ready, but I also feel I should keep you informed on what I’m seeing and hearing about the Orange County, CA housing market.  Ultimately, it’s your choice when you’re ready to buy.
 
I’m hearing that because the stock market appears to be performing better that interest rates might go up.  Historically, as long as I’ve been watching (about 20 years), rates tend to be higher around June 8 and Dec 8, and lower closer to April 8 and October 8.  My concern, given how low they’ve been for so long, is that they’ll go up, and maybe not come back down as low as they are right now.  Though, given it’s an election year, I can’t imagine any political party wanting higher interest rates; but, then again, it might show strength in the economy and give the Democrats a boost.  Obviously, I have no crystal ball, but it does concern me.
 
I recognize that many buyers are still hoping to purchase a short-sale enabling a purchase at a more affordable price in any one particular area of choice.  Just so you are aware, there are fewer and fewer short-sales, and since the standard sales are beginning to push prices up, short-sale prices will follow the upward trend.  I saw numerous short-sales that closed only a few months ago priced at $579k that are currently selling for as much as $100,000 higher and there are 6 families waiting at the door to see the home.  SOUND FAMILIAR?
 
When I moved here in ’95 and got my license in CA in ’96 there were no short-sales left.  Coming from Kansas, I didn’t even know what a short-sale was…  And, that downturn started in ’91.  This one has already been 6 years old.  I’m not claiming to know what will happen, just historical facts that it might be helpful for you to be aware of. You might wonder if this is another politically motivated false start; however, unlike previously, the Government has not put out any particular incentives to get the Orange County, CA market moving again.
 
A month or two ago, Aliso Viejo was lagging behind other OC communities.  This past weekend showed me that it is definitely catching up!  No longer are there 50% gains to be had off of the highest priced sales from ’06.  When sending information yesterday to one of my buyers, I was seeing less than a gain of $200k on homes currently priced in the $600k range.  Even still, should a buyer make $200,000 it’s no slouch!!  Buyers — better in your pocket than the sellers!!  Sellers — your time is coming!!
So, if you’ve been waiting on the fence for a sign… this may well be it!  If you’d like to discuss this further or to begin your home search, call me at 949-929-6343.  You can also visit my website by clicking here.
As always, I’d love your comments, and be sure to sign up below to begin to receive notices of future Blog entries.

 

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Posted in Buy a House, Community, First Time Home Buyers, Foreclosures, Homes, Homes for Sale, Housing Market, MLS, Mortgages, Neighborhood, Real Estate, Real Estate Agent, The Right Time to Buy, The Right Time to Sell | No Comments »

SB458 Causes Havoc as Predicted!

Tuesday, August 16th, 2011

A few months ago, just when doing a short sale was getting a little more organized, SB458 was voted on and passed.  You may need to read my post just previous to this one wherein I predicted issues regarding SB458. 

To recap, SB458 is Senate Bill 458 and seemingly, but not in reality, it was designed to help borrowers complete short sales on their homes and come out of it without owing any remaining deficit to either the First or Second mortgage, or Equity line holders. Unfortunately, the outcome of this Bill, because it did not address deficits should the home owner be foreclosed on, allows the Second mortgage and/or Equity line holders to ask for so many dollars during the short sale that the First mortgage holder could not possibly agree, whereby forcing the home into foreclosure!  In reality, this is the result the Second mortgage and/or Equity line holders want.  This way, they can make agreements with the borrower to have their debt paid in full, if so desired.  And, why wouldn’t they want this?  So, in reality, the SB458 is having the exact opposite effect that was intended.

First some good news:  It’s my understanding, though not confirmed yet, that SB458 will be edited, hopefully, as soon as the end of September.  Probably before lots of people called in, I was originally told it could be the end of the year before it is edited.  Honestly, I don’t care how long it takes as long as Governor Brown freezes foreclosures until SB458 is edited appropriately.

It’s my guess that SB458′s edit will include some protection for those that will be or have been foreclosed on and it will be retro-active similarly to the original writing of SB458; and, the edit will encourage the banks’ work together to make short sales happen, and happen more quickly. Somehow, everyone is going to have to come to agreement on some percentage, I say 10%, that the First Mortgage will set aside for the Second or Equity Line.

Now the bad:  As I see it, if foreclosures are not frozen and homes do foreclose between now and the edit, borrowers may have to hire attorneys to go against the Banks that rushed the foreclosure to beat the edit.  Attorneys may also be required to adjust borrowers’ credit to show the sale as a short sale in lieu of foreclosure.  First mortgage holders will be out additional funds it costs to do a foreclosure in lieu of a short sale, and those banks could even go after the other banks for reimbursement.  The Realtors caught in the middle who have listed the home, sometimes for years at a time, will not be paid for work performed to save the Borrowers; and as what probably happens all the time, the Realtors with the Buyer can go directly to the bank with that ready, willing and able buyer and help them purchase the home directly from the bank, cutting out the Realtor that did all the work.

I wonder if the Government recognizes that short sales are already being halted on homes that were already approved by its lien holders because of omissions made on SB458 now giving lien holders the right to pursue their debt by way of a foreclosure?

The saddest part of all of this, as the negotiator put it at USAA, is that Veterans, who have already been through enough, are now losing their homes, their credit, and therefore, as I understand it, their ability to achieve security clearances.  In addition, all those buyers, Buyers’ Agents and Listing Agents currently waiting on a short sale to be approved are waisting their time.  At this point, it’s doubtful they will close unless their chosen property only has one loan, or possibly if both loans are at the same bank.  And, just when we don’t need it, more foreclosures will lead to BIG price reductions and contribute to a further weakening of our economy.

We can avoid all of this IF Governor Brown would Freeze Foreclosures until this issue is settled.  This needs to happen today!  Please help me get the word to Governor Brown. It’s very important we get this message in front of Governor Brown today!

To discuss this further, do not hesitate to comment, or contact me at 949-929-6343. To see how I work visit my website by clicking here.

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Posted in Being Foreclosed On, Buy a House, Community, First Time Home Buyers, Foreclosures, Homes, Homes for Sale, Housing Market, Mortgages, Real Estate, Selling a Short Sale, Townhomes | No Comments »

California’s SB458 Works Opposite of Intent

Thursday, July 28th, 2011

Ut Oh, California’s new SB458 bill that was passed a couple of weeks ago was intended to keep borrowers from having to repay their deficiencies on both their First and Second or Equity Line loans in the case of a short sale.  Unfortunately, it appears that it will work in the reverse.  Instead of protecting consumers from having to repay deficiencies after a short sale; it appears the banks will shut down negotiations for short sales altogether and opt for foreclosure instead.

The bill’s written perfectly for those that sold short already.  It’s no longer limited to purchase money loans; and it no longer excludes Second loans or Equity Lines of Credit.  SB458 specifies, in my interpretation (though you should discuss this with your attorney), for any lender on a property of 1-4 units whose loan is solely collateralized by the property is compensated by means of a short sale; they are no longer able to seek remedy for the deficiency afterward.

Just when some of the major banks like Bank of America; and now Wells Fargo, or any bank utilizing Equator as an organizational method, have finally hired (almost?) enough staff and stopped losing paperwork; and are actually accomplishing the completion of short sales in a more reasonable amount of time; this law unintentionally cut everyone off at the knees.

In Southern California, it’s customary for the First Loan to offer the Second an approximate $3,000 settlement for short sales; and, in most cases, it was accepted. I’m guessing this was because the Second/Equity Line of Credit holder could eventually pursue compensation through the courts with a deficiency judgment.

The author seemingly missed an unintended loophole.  A foreclosure still allows the lenders to seek a deficiency judgment.  What would be the incentive for either the First or the Second/Equity lender to choose a short sale any longer when they can still go ahead and foreclose and still have the right to pursue a deficiency judgement.  Unless this previously unnoticed omission in the Bill is quickly corrected to include protection for the consumer against a deficiency judgment in the case of a foreclosure, we may well have seen California’s last short sale.  The only way around this, to my knowledge, would be for these homeowners to take bankruptcy.  Then no one is the winner.  It leads to the consumer having ruined credit (worse than with a short sale); the Realtor’s are out of business unless you have an in with the banks to sell foreclosed properties (don’t even get me started on this); the banks expenses go up as a foreclosure is more expensive to close than a short sale; and my understanding is the banks are not allowed reimbursment of a deficiency judgment.

One can only imagine what this would do to the housing market, eh?  I’m working on a short sale right now.  After losing seven buyers all for different reasons, we finally have someone who will stay in the deal.  Unfortunately, the First and Second loans are not at the same bank.  Even though the First is offering $10,000 to the Second, the Second wants $27,000+.  I wonder where they think all that money’s coming from!  They already cut the Realtor’s commissions, they’re getting more from the First than usual and the Seller doesn’t have the money.  Unfortunately, these Seconds think the Buyers should pay it on top of the purchase price.  Does anyone out there think the home will appraise for those additional funds on top of the purchase price?  Even if the Second had incentive before the new law, they certainly don’t have any now.

Maybe all those folks that keep saying the banks have these stockpiles of foreclosed properties they’re waiting to release will be right after all…  YIKES!!

If you’d like to review SB458, click here.  To sign up to receive notice of future blogs, be sure to sign up below.

 

As always, I’d love to hear from you on how you feel about this topic and any other.  To see how I work or to hire me as your Realtor click here.

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Posted in Being Foreclosed On, Buy a House, Community, Foreclosures, Homes, Homes for Sale, Housing Market, Mortgages, Property, Property Investment, Real Estate, Real Estate Agent, Selling a Short Sale | 3 Comments »

A Thank You and a Warning to Home Owners

Monday, July 11th, 2011

I cannot thank my readers enough for all the wonderful comments I’ve been receiving.  They do not go on deaf ears!  I’m thankful that I could be of help to you!!

To show my appreciation and just to simply inform:

Lately, I’ve been hearing from my clients that their loans that are recasting have not been done correctly.  If you have the type of loan that recasts, be sure to review your note, or have someone else that you trust review it, and make certain that your new payment has been calculated properly; and most importantly, that it is really time for your loan to recast!

One of my clients had a loan that was not to recast until year 10 or until they owed 125% of the original loan amount.  They currently owe about 107% of their loan amount and it is currently only the 5th year.  Imagine how surprised they were when their payment incurred a significant increase and they were lucky… they knew it wasn’t correct.  They still had to pay the new figure or it would have gone against their credit; and it took a LOT of effort talking to their Realtor, Financial Advisor, previous lender, and numerous calls to the bank to get it reversed.  They were finally successful; but it wasn’t pretty!

I simply DO NOT want some of you unsuspecting, wonderful people out there to have the same thing happen to you and have it go unnoticed.  You could be over paying on your loan by over a thousand dollars monthly.

As far as the current market is going in Irvine and Orange County, CA as a whole–it seems fairly status quo when compared to the last quarter of 2010.  I have noticed properties over a million dollars are creating more interest.  There have been lots of sales since March in the Northwood VI (Pointe) tract.  In general, for me, since May I’m having one of the busiest summers ever with both listings and buyers.

Again, in the Orange County, CA area; REO (foreclosed properties) listings are down.  The banks ARE becoming more cooperative on modification work outs and especially have become more streamlined when handling short sales.  I never thought you’d find me saying this; but, Thanks Bank of America and Wells Fargo for using Equator!

For those of you investors out there; take note!  What I’m noticing is the younger families/first time home buyers are leasing for shorter terms hoping to save enough to buy.  What’s better?  Do you take them because they have better FICO scores; or the sophisticated homeowner who’s FICO scores are destroyed, but will live in the home longer while repairing their credit?

I would love to hear from you as to what you’re seeing out there, how I can assist you with your current loan issues, or to discuss whether this is the right time for you to modify or sell your home or become landlords…

To sign up to receive notice of my next post be sure to fill out the form below:

 

Hopefully we can get a discussion going on what you believe the current housing market to be in Irvine and Orange County, CA.  To learn more about how I work click here.

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Posted in Buy a House, Community, First Time Home Buyers, Foreclosures, Homes, Housing Market, Mortgages, Neighborhood, Property, Property Investment, Questions and Answers, The Right Time to Sell | 15 Comments »

Can I Still Buy a Condo with 5% Down?

Tuesday, June 7th, 2011

A loan for condos with 5% down might disappear!

I was reviewing what subjects people were looking for when they came to my blog and far and away the most popular topic was whether they could buy a condo with 5% down.  As a reader, you’re probably even wondering if you should invest in a condominium at all because of rumors that a condo is not a good investment.

First, I need to define what a condo is in Irvine California, as well as Southern Orange County, California.  Many relocating to the area are accustomed to condos being only ‘stacked’ living, or one unit directly on top of another.  In Irvine and Orange County, condominiums can even be detached homes.  Typically, even town homes are referred to as ‘condos.’  The label has more to do with the way the builder designated the unit when it was built, than it does the type of property it is and the rest has to do with some (important) legal mumbo jumbo.

What I’ve noticed is, if you buy a Condo in an area that contains a lot of condominium units, for instance, in Irvine’s Woodbridge Association, where a greater than 50% of the properties are condominiums; then they tend to hold their value as well as detached homes.  I have also noticed a much longer time on the market to sell a condo in Laguna Niguel, for instance, where there are far fewer condominiums.  In Irvine, when a property has all the same aspects as a detached, single family residence; except it’s attached, you might see a price difference of about $100,000.  What you need to understand in this circumstance is you’ll also be selling it for about $100,000 less.

Another not well known fact is that lenders charge about an 1/8th of a point higher interest rate for a condo. In most cases, that does not affect the payment by that great of an amount and when property values are in the range they are here in Southern Orange County, it enables buyers to purchase more space for a more affordable price in a highly desirable area with a highly rated school system wherein all four of its high schools are rated in the Top 10 in the State; and, Irvine is typically listed in the Top 10 safest US cities for its size.

Another factor about which a condominium buyer needs to be aware has to do with FHA purchases or non-cash purchases, especially in the lower price ranges throughout Orange County, CA. It will be much more difficult to get a loan if there is a large area home owner’s association delinquency, a large number of non-owner occupied homes, etc.  These condos tend to sell for cash if they do not qualify for low down purchases. On the other hand, you may want to consider whether a purchase in this area is a smart move. If you require more information on this, be sure to contact me at 949-929-6343 or visit my website and email me by clicking here.

Going back to the initial question of your ability to buy a home with 5% down or less, depends first on your lender and second on your FICO (credit report) scores.  This is why FHA loans are so popular; but you need to keep the issues above in mind.  Unfortunately, the amount down currently allowed to purchase a home or condo might be about to change. The government is considering enforcing a nothing less than a 20% down rule. You’ll need to stay informed through this Blog by signing up below to receive an email notice of new blog postings.

 

As always, I look forward to your comments or questions!

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Posted in Buy a House, Community, Condos, First Time Home Buyers, Mortgages, Questions and Answers, Real Estate, Relocation, Townhomes | 30 Comments »

MANY SAY TO BUY NOW!

Friday, April 8th, 2011

I’ve received numerous publications from varying sources and ALL of them point to it being the time to buy now and they back up their opinions with facts I cannot dispute.  Let me post a few you might enjoy reading.  I’d love to have your feedback.

Check into the following:

Fortune Magazine:  http://public.remax.net/public-News/Pages/FortuneCoverStory.aspx

I’ve previously posted information from other lenders; and here’s some interesting information from yet another, John Farrell points out:

“FHA Announces April 18, 2011 Increases in Annual MIP

Supporting its publicly declared goal of accelerating the restoration of the required reserve levels of the Mutual Insurance Fund, the FHA announced yet another increase in the annual mortgage insurance premium.

In its Valentine’s Day mortgage letter (ML 11-10) FHA announced a 25 basis point (0.25%) increase in the annual mortgage insurance premium. The result for loans with case numbers assigned on or after April 14, 2011 and depending on the maturity and loan to value increases the annual premium to:

30 Year

•<= 95% LTV from 85bp to 110bp
•> 95% LTV from 90bp to 115bp

15 Year

•<= 90% LTV from ZERO to 25bp
•> 90% LTV 25bp to 50bp

To illustrate the change in payment in Mortgage insurance for your client:

Let’s take a purchase price of $700,000.00.
Your client finances 96.5% with 3.5% as down payment.
Loan amount would be $675,500.00.

Based upon the OLD MI of .90% the current MI payment per month would be $506.63.”

Now with the upcoming new MI factor of 1.10%, the new MI payment per month would be $619.21.  Which is a total increase per month of $116.00.

Here’s another Lender, Bruce Pham’s announcements on numerous new loan programs available:

“Below is a short summary of what we offer;

Conventional Full Docs, DU Refi Plus, HomePath by Fannie Mae, Jumbo, FHA, VA, VOE Only/Almost Stated, and Private Money.
 
Pre-Approve Your Clients with us, a direct lender.
 
VOE:    No Pay Check Stub, No W2, No Tax Returns, and N4506. Max LTV 80%. Minimum FICO 620. Okay for OO, NOO, 2nd Home, Purchase, Cash Out Refi, and  Flip.
 
FHA:    3.5% down payment with minimum FICO 640. Okay for BK discharged over 3 years, Repair Escrow Holdback, Self Employment, Non-Permanent Resident        Alien, Non-Occupant Co-Signer, Seller can Contribute Up To 6%, Subordination of Federal Tax Liens, and Streamline with our without Appraisal.
 
DU Refi Plus with or without Appraisal.
 
HomePath:   Low Down Payment 97% LTV on Full Doc, Flexible Mortgage Term, No Appraisal Required, No Mortgage Insurance. OK VOE Doc Type LTV up to 90%. Minimum FICO 660.”

I receive numerous of these types of emails daily and all offer something new.  The more loan options = more buyers making bids on the same homes you want = higher prices…

My opinion, it’s just around the corner, in fact, multiple offers are already rampant.  I know you don’t want to hear this, but it’s happening.  I have a client that made an offer on an REO in Huntington Beach, Orange County, CA that was not in good condition; another REO in the same tract had just entered escrow though it’s not yet closed, in excellent condition; and the listing agent of that home gave me an idea of where that one might close and that price seemed to be at the listing price of the REO my client was considering needing anywhere from $30-50,000 of repairs/improvements to bring it to the level of the one in escrow. Compared to that sell, my Buyer and I agreed on where he might make his offer.  The listing agent had just received another offer that he said was ‘a low offer,’ so I’m figuring probably somewhere around where we’re thinking to offer. By the time I reached the listing agent, they had countered back and forth a few times and they were close to a decision.  The listing agent gave me an idea where he wanted to be and it was only $5,000 under the list price and remember, that list price was just about at the sales price of the REO in escrow that was in excellent condition.  My Buyer was going to utilize the new 203 FHA home improvement loan, also opening the doors for many home buyers.

The listing agent gasped when I told him what the Buyer’s offer was and he said:  “Not in this market.”  Indicating a good market at this price point in Huntington Beach, Orange County, CA.  You, as the reader, might think this unusual; but it’s happening numerous times a day in many locations.  Last week, Irvine California homes SOLD jumped from a typical 28 to 50!  In one week!  All of this tells me it’s true, Buyer’s need to get their ducks in a row, and the sooner the better!!

I’d love to have your feedback on this article. To learn about how I work, go to my websites by clicking here and here. Please let me know which ones you enjoy more. You can also find me on Twitter. Don’t forget to sign up below for email notices of new blog entries.

 

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Posted in Buy a House, First Time Home Buyers, Foreclosures, Home Improvement, Homes for Sale, Housing Market, Mortgages, Property Investment, Real Estate | 47 Comments »

Are Loans in Orange County Loosening Up?

Monday, February 7th, 2011

YES THEY ARE!

Halleluja!!   Hot off the Press!!

There are lenders that are beginning to loan on condo’s with 5% down again!  Like with an FHA loan, this loan plan requires 3.5% down from the Buyer and allows the Buyer’s relative to assist with the 1.5% remaining.  The Buyer still needs a 720 minimum FICO score because they still must qualify for PMI (Private Mortgage Insurance).  The particular lender presenting this program mentioned that the monthly cost for PMI is .9%.

Also similar to FHA loans, any particular condominium area needs to qualify in three specific arenas:  1) There can be no more than 15% delinquencies; 2) There can be no more than a 50% non-owner occupied; and, 3) the budget must be deemed by the lender to be ‘healthy.’  With many condominium FHA approvals expiring, this couldn’t have come at a more opportune time. 

In addition, I hear there’s some loosening up for loans on second homes.  Apparently, you can now get loans for second homes with only 10% down!

Be forewarned, with the increase in Buyer activity I’m already seeing; a drop in inventory in Irvine, CA which is atypical for Irvine in February, and this news on loans, the market, should all this be maintained, should continue to heat up.  (Orange County, CA as a whole, is lagging a bit.)  With this prices go up and so do interest rates.  You cannot beat this market today!

Buyers, it is a must that you get your loans in place prior to going out to look at homes so I’m showing you the right properties for your individual circumstances.  I know this is contrary to what you’re reading in the newspapers but my heart is on the pulse, I’m out there in the streets and this is what I’m seeing every day.

If your preferred lender cannot do these types of loans for you, yet; be sure to get in touch with me and I’ll work hard to find someone that can!  You can reach me through this venue by clicking here or call me at 949-929-6343.

To sign up to receive more timely notices and excellent educative materials, fill out the form below.

 

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Posted in Mortgages | 3 Comments »

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